There are many rewards credit cards from which you can choose. However, typically the several listed here are the most common. These include airline credit cards, dining credit cards, travel credit cards, gas credit cards and cash back credit cards.
Use the free credit card chaser tool to compare rewards credit cards online right now!
You will find that there are rewards credit cards that are much more specific than this even. For example, you can find rewards credit cards that reward you for:
- Buying office supplies
- Buying shoes
- Buying handbags
- Paying your bills
You can just about find a rewards credit card for any style of shopping or for any cause that you can imagine!
What is a rewards credit card?
A rewards credit card is designed to pay you back for the purchases that you make. Rewards cards are used by credit card companies as an incentive to get you to choose their credit card.
Rewards credit cards are usually based on a points system that allows you to earn points for every $1 that you spend. Cash back cards are usually based on a percentage system. You will earn 1% cash back for each $1 that you spend, for example.
Most credit card companies give you access to your points within 30 days of making your purchase. Most are faster than this, but this is the timeframe that they offer, just in case. When it comes to cash back, there are a couple of different ways that this works.
Some companies automatically send you a check when you reach a certain level of cash back rewards on your card. Others allow you to choose when you get your cash. Many credit card companies pay out quarterly or even annually.
Are any particular rewards cards better than others?
When it comes to rewards cards, there are certainly some deals that are better than others are. For example, you might find that one rewards card offers you 50,000 bonus points after your first purchase while another offers none.
You will also find that some cards work strictly on the 1 point for $1 exchange while others will offer your 5 points or more per $1 you spend on specific items or on specific websites.
Some cards have very high exchange rates, for example, needing 50,000 points to redeem a reward. Others offer redemption with as few as 2,500 points.
It’s not just the points that you have to look at either. You will find that in general rewards cards have higher interest rates than classic cards. In addition, some rewards cards have much higher interest rates than other rewards credit cards.
You must understand all of the terms of the agreement that you are entering before you make a final decision about your credit card. After all, what good is it to get two points for every $1 you spend if your interest rate it 16%?
You can find a list of the top rated credit card companies at JDPower. The ratings include a customer review rating for rewards and benefits, both of which should interest anyone interested in a rewards credit card.
Are rewards credit cards better than classic credit cards?
Many people fall for the idea that a rewards credit card helps to negate the amount of money that they spend on interest on their credit cards. For most people this simply isn’t true. If you are carrying a balance on your credit card from month-to-month, then you aren’t balancing out the interest you are paying with the rewards points that you are getting.
However, if you are planning on getting a credit card and maintaining a month-to-month balance regardless, then this could be a good option for you. Just remember, as mentioned earlier, rewards credit cards have higher interest rates so you are paying more in interest for the rewards points.
If you are a disciplined spender who only spends what they can pay off at the end of the month, then a rewards credit card is an absolutely great option for you. People who don’t carry a balance on their credit card and get rewards points for their spending are beating the system, so to speak. Those folks are literally getting something for nothing!
No matter what your credit situation, you want to get the lowest possible rate on your credit card. You can compare cards online to do this and find a variety of rewards cards that fit your spending style as well.
- Where can I find dinner credit card offers?
- How and when do I get my cash back from my cash back credit card?
- What kinds of rewards program credit cards are available?
- What should I look for in credit cards that earn rewards?
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